Lowell Deeds

The Federal Reserve took steps this week to stop mortgage practices that have contributed to the recent increases in foreclosures. In simple terms the goal of the policies is to stop banks from giving loans to people who can’t afford them. It sounds logical doesn’t it? Of course, the new policies are mainly focused on high interest loans. The following three key provisions proposed by the Federal Reserve come directly from the Boston Globe:
Borrowers must document their income.
Lenders must allow refinancing without penalty before the interest rate increases.
Lenders must include property taxes and insurance in estimating the monthly loan cost.
None of this is rocket science…but unfortunately a predatory subprime lending mentality made it necessary for the Fed to take action.